Question

1.IRR

Project K costs $61,364.29, its expected cash inflows are $14,000 per year for 9 years, and its WACC is 10%. What is the project's IRR? Round your answer to two decimal places.

2. Payback period

Project K costs $55,000, its expected cash inflows are $9,000 per year for 11 years, and its WACC is 9%. What is the project's payback? Round your answer to two decimal places.

3. NPV

Project K costs $60,000, its expected cash inflows are $10,000 per year for 10 years, and its WACC is 9%. What is the project's NPV? Round your answer to the nearest cent.

Answer 1

Project K costs $61,364.29, its expected cash inflows are $14,000 per year for 9 years, and its WACC is 10%. What is the project's IRR? Round your answer to two decimal places.

Cost	$61,364.29
0	$(61,364.29)			irr	17.45%
1	$ 14,000.00
2	$ 14,000.00
3	$ 14,000.00
4	$ 14,000.00
5	$ 14,000.00
6	$ 14,000.00
7	$ 14,000.00
8	$ 14,000.00
9	$ 14,000.00

irr forumula = IRR(C5:C14) (the column having cash flows).

Project K costs $55,000, its expected cash inflows are $9,000 per year for 11 years, and its WACC is 9%. What is the project's payback? Round your answer to two decimal places.

Cost	$55,000.00
		Discout factor		Cumulative Cash Flow
0	$(55,000.00)	1.00	(55,000.00)	(55,000.00)		WACC	9.00%
1	$    9,000.00	0.92	8,256.88	(46,743.12)
2	$    9,000.00	0.84	7,575.12	(39,168.00)
3	$    9,000.00	0.77	6,949.65	(32,218.35)
4	$    9,000.00	0.71	6,375.83	(25,842.52)
5	$    9,000.00	0.65	5,849.38	(19,993.14)
6	$    9,000.00	0.60	5,366.41	(14,626.73)
7	$    9,000.00	0.55	4,923.31	(9,703.42)
8	$    9,000.00	0.50	4,516.80	(5,186.63)
9	$    9,000.00	0.46	4,143.85	(1,042.78)
10	$    9,000.00	0.42	3,801.70	2,758.92	payback period	9.38	years
11	$    9,000.00	0.39	3,487.80	6,246.71

Project K costs $60,000, its expected cash inflows are $10,000 per year for 10 years, and its WACC is 9%. What is the project's NPV? Round your answer to the nearest cent.

Cost	$60,000.00
		Discout factor		Cumulative Cash Flow
0	$(60,000.00)	1.00	(60,000.00)	(60,000.00)		WACC	9.00%
1	$ 10,000.00	0.92	9,174.31	(50,825.69)
2	$ 10,000.00	0.84	8,416.80	(42,408.89)
3	$ 10,000.00	0.77	7,721.83	(34,687.05)
4	$ 10,000.00	0.71	7,084.25	(27,602.80)
5	$ 10,000.00	0.65	6,499.31	(21,103.49)
6	$ 10,000.00	0.60	5,962.67	(15,140.81)
7	$ 10,000.00	0.55	5,470.34	(9,670.47)
8	$ 10,000.00	0.50	5,018.66	(4,651.81)
9	$ 10,000.00	0.46	4,604.28	(47.53)
10	$ 10,000.00	0.42	4,224.11	4,176.58
		NPV	4,176.58

Discount factor calculation = 1/(1+discount rate)^years